• USD/CAD trades in negative territory for the fourth consecutive day, near 1.3410.
• Economists expect the first rate cut to occur in May or June, though a cut at the Fed’s March meeting is not off the table.
• Canada is expected to see a slight expansion in November GDP growth numbers.

The USD/CAD pair remains under selling pressure during the early Asian trading hours on Tuesday. Canada’s Gross Domestic Product (GDP) for November will be due on Wednesday, which is forecast to expand by 0.1% MoM. The attention will shift to the Federal Open Market Committee (FOMC) meeting on Wednesday, with no change in rate expected. At press time, USD/CAD is trading at 1.3510, down 0.01% for the day.

The US Core Personal Consumption Expenditures Price Index (PCE) for December, the Fed’s preferred inflation gauge, rose by 0.2% on the month from 0.1% in the previous reading and increased by 2.9% on a yearly basis from the previous reading of 3.2%. On Monday, the US Dallas Fed Manufacturing Business Index for January came in at -27.4 versus -10.4 prior. The Federal Reserve (Fed) will announce its interest rate decision on Wednesday. Most economists expect the first rate cut to occur in May or June, though a cut at the Fed’s March meeting is not off the table